1.  Mutual Funds have a five letter ticker FSTFX – Fidelity Short-Intermediate Municipal Income This fund buys Municipal Bonds with a maturity date of 1-5 years  There are several ways to find information on your fund on the web  Morningstar.com – lists funds by ticker and category  Lipper.com – can compare funds via its “Lipper Leaders” interactive feature

2.  With more than 30,000 Mutual Funds to choose from, we need help!  Most corporate retirement plans offer employees a choice of mutual funds  Employees risk their retirement savings on these funds  A teacher at Roslyn High School can choose among thousands of funds  Many jobs limit you to 10-15 choices

3.  Some funds charge a lot of fees  The fees are calculated as a percentage of the total asset value of your account  Types of fees: Management fee: For the fund manager’s salary 12 b-1 fee: For advertising the fund Report Fee: For mailing reports to shareholders Front or Back Load: A sales commission fee Redemption Fee: Charged to investors who sell prior to an agreed-upon holding period

4.  Total all the fees  Divide the fees over your account total  This is your Expense Ratio  The Expense Ratio lowers your return Example: You received an 11% return on your Mutual Fund The Expense Ratio was 2% Your real return is 9%  Funds with high expense ratios may not deliver higher returns

5.  Like stocks that pays dividends, many funds pay a “distribution”  The distribution helps you increase your return, however: Distributions are taxed (unless your fund is in a retirement account, then it gets taxed when you redeem it during retirement) You have to be careful when you buy a mutual fund, because you don’t want to “buy the distribution”

6.  The distribution reduces the Net Asset Value When you “buy” the distribution, it is like having your stock price drop immediately You’ll need to read the Prospectus The Prospectus will tell you when the distribution dates are  Most investors dollar cost average into their retirement accounts Sometimes they do “buy” the distribution